This Week In Your Wallet: 10 Ways You’re Throwing Money Away
I don’t like to think of myself as someone who throws money away. (I mean, seriously, that couldn’t be too good for the resume.) But as I took a gander at USA TODAY’s story that laid out 10 ways people throw money away, I saw myself. More than once. Not always redeeming gift cards. Guilty. Buying a Groupon and letting it expire. Done that too (although this is why I don’t buy Groupons anymore). Forgetting to follow up on a rebate. Yup. Add it all up and there’s definitely a few hundred there.
It’s worth a read, and a little honesty with yourself about how you typically behave as a consumer. You could find a little bit of cash, as well.
And you may need it….
Because it’s officially summer and it’s time for that vacation! The dog sitter is booked, the newspaper is paused and the bags are packed. You’ve got everything covered — or so you think. According to new research from Experian, the one thing (too) many Americans are forgetting at home are their budgets — 68 percent of people are overspending on those jaunts away from home.
We’ve all been there. One drink by the pool turns into many. A once-in-a-lifetime excursion pops up. You have to get the matching t-shirts. Or you didn’t do the math on the hotel fees. Overspending on vacation is easy to do, but just because you’re on vacation, it doesn’t mean your budget gets to be. Because, what might be worse than a few extra pounds — or some funky tan lines — is coming home in the red (I’m talking about the kind of red aloe can’t fix).
The survey found 49 percent of travelers have accumulated credit card debt while traveling — and 46 percent have paid for a vacation with a credit card when they didn’t have enough saved. You know the fix here: Plan ahead, make a budget and stick to it. And to get you started, here are a couple of my headline picks this week for saving on airfare and hotels.
See You In September
After months of wondering whether the Federal Reserve was going to raise interest rates in 2015, we finally have some answers. The verdict from Fed Chair Janet Yellen? A strong maybe. While the Fed closed the door on raising rates this month, they hung a sign on it that says, “See you in September.” As CNNMoney puts it, the Fed thinks the economy is good, but that it could be better. It grew at a healthy rate of 2.4 percent last year, and policymakers were hoping for more of the same (if not more) this year. But right now, it’s slated for only 1.8 to 2 percent growth. The Fed would also like to see “further improvement” in wage increases, more part-time workers finding full-time gigs and inflation closer to 2 percent before they move the needle.
It’s been almost a decade since the Fed raised rates, so investors are a little unsure of how it’s going to impact the market. The low rates have helped companies and the market recover since the Great Recession, and raising rates would “take off the training wheels” so to speak. It’ll shake things up for everyone, including you…
Don’t Let HELOC Wreak Havoc
Meanwhile, whether or not rates rise sooner or later, here’s a heads up for HELOC. This year many of the home equity lines of credit taken during the market’s pre-recession boom are starting to reset. Meaning: Some homeowners are facing minimum monthly payments that will more than double. (HELOCs are structured with the first 10 years as a draw period. After that initial 10-year period, the line of credit can no longer be tapped and the borrower is responsible for paying back any outstanding principal, with interest.)
To put it in perspective, Greg McBride, CFA and Bankrate’s chief financial analyst, says during each of the next three years, $40 to $50 billion worth of HELOCs will be subject to these resets. If yours is one of them, don’t panic. As long as you know your reset is coming, you can plan ahead so that your HELOC doesn’t wreak havoc on your budget. And if you have a decent amount of equity in your home you may be able to either refi that line of credit – or refi your first mortgage. I tell you how to go about both — and offer more reset-preparation tips — on Bankrate.com.
Have a great week,
Jean
